The Heavy Duty Parts Report
In each episode, Jamie Irvine and his guests have conversations that empower heavy-duty people. They discuss tips, tools, and technology that help heavy-duty parts manufacturers and distributors sell the right parts to fleets, repair shops, and truck operators.
The Heavy Duty Parts Report
VisiParts: Revolutionizing Parts Visibility
Episode 282: Imagine having complete visibility of your heavy-duty parts sourcing process. Max Zorbas and Jamie Irvine unravel the shifting landscape of the parts industry, where the traditional supply chain has broken down due to the impact of COVID-19, and discuss the new alternatives that are emerging.
Max, with his extensive experience in running a repair shop, shares first-hand frustrations about the timely delivery of parts and the dire need for improved communication at each step of the process.
This episode is a must-listen for anyone who’s fed up with the lack of parts visibility in the heavy-duty parts industry.
Show Notes: Visit HeavyDutyPartsReport.com for complete show notes of this episode and to subscribe to all our content.
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You're listening to the Heavy Duty Parts Report. I'm your host, jamie Irvin, and this is the place where we have conversations that empower heavy duty people Selling heavy duty parts. You buy it from a manufacturer, you bring it into your warehouse, you send it out to the customer when they need it. Sounds like it should be pretty simple, but it's a lot more complicated than that, and over the decades we have used the traditional distribution model to get parts from the manufacturer, from the supplier, into the hands of the end user through distribution, whether that comes through the dealership and the OAS side of the business or it comes through the aftermarket side. But the basic structure has virtually been unchanged for decades. But things are changing and there's an opportunity for us to make some big, big strides if we use the right kind of technology, and that's what we're here to talk about today. So I'd like to introduce my guest.
Speaker 1:Max Orbus is from Crown Diesel 24-7. They run a repair shop, they run mobile repair, and he is a partner of mine in a company that we want to introduce to you today in today's episode. So let's get Max on the show. Max, welcome to the Heavy Duty Parts Report. So glad to have you here.
Speaker 2:Hey, jamie, pleasure to be on. How are you today?
Speaker 1:I'm doing good. I'm doing good. I was really looking forward to this call and opportunity to talk to you about heavy duty parts and the reality on the ground. I think you and I have two very distinctly different perspectives, which is going to make for a good episode. I'm going to represent the parts and sales people, and you're going to represent the buyers and the technicians and people who work in the shop. So let's just get started and talk a little bit about what the trends are. Right now. We're recording it's the middle of 2023, and the industry is changing. What are the trends that you're seeing? What changes in the industry have you seen over the last few years?
Speaker 2:We've seen a big shift from OEM dealer parts to more aftermarket what's available on the shelf. Everyone talks about the supply chain, slow downs, waiting for CPCs, different parts from the dealer, so they're looking at websites, alternatives, third party sellers. We prefer the dealer, but you've got to find the part where it is. That's the biggest shift I see is aftermarket.
Speaker 1:Yeah, so I mean, over the last couple of years, my guests have been repeatedly talking about the supply chain issues that were brought on by COVID. One of the conversations that I had is I talked to a lot of different fleets during COVID and I started to hear a common theme. It was something like this Before COVID, as a fleet we were worried about the driver shortage, we were worried about the technician shortage, but we weren't really thinking that much about parts visibility. When the supply chain collapsed, it brought parts visibility to the top of mind for a lot of fleet operation managers and fleet maintenance managers, because they started to understand that when you lose visibility of a part, you might make the wrong decision. If you make the wrong decision, it can have a domino effect that can really really drive up costs. I think what you're talking to about this shift and where people buy, COVID forced people to consider alternatives in a way that they didn't have to before. Is that what you were seeing as well?
Speaker 2:Yes, hugely. It's quality return process cores. It's all out of whack. You're dependent on the third party to bring the information back to the dealer distributor. You're relying on them, so it's every process a different.
Speaker 1:Okay, Max, walk me through that from your perspective. You have a repair shop, you have a truck that has come in. It needs a repair that person who's operating that truck, they've got a load to deliver, they've got to go. Walk me through the frustration that you feel when you order a part and then it doesn't show up when it's supposed to.
Speaker 2:Everything's a timeline. The drivers are waiting. I call it the angry customer perspective. He's saying where's my part and can the repair be done? We're calling Freightliner, the dealer, whoever, waiting for our one representative to give us time. On the part we hear it's on the shelf or it's at a different facility. We have to ship it here. So at the same time we're making calls seeing if it's on the shelf somewhere else we could go pick up, because if it's shipping out of town hours away, we have a tight timeline for the driver to get back on the road. So we're shopping immediately.
Speaker 2:There's no true order of anything unless you're there talking to the parts guy and they walk back and have the partner hand. That's the only visibility we have. Other than that you're hoping that your communication makes it to the front sales guy to the other shop and your order gets fulfilled. So it's frustrating. A lot of calls back and forth to the driver. They're waiting to the company. The company's asking us because they have a shipment to make. The door's closed for that shipment in four hours and we don't have a good answer.
Speaker 1:Right. So already I'm hearing about several calls that you're having to make, sometimes several calls to the dealer or the distributor. Now, when that dealer or distributor's parts person phones you back and says, okay, I found the part and it's coming in tomorrow, when you hear that information, what goes through your head? How do you then adjust your plan according to what you've just been told?
Speaker 2:So from there we feed it down to the customer. I say customer I mean the driver right there on site, he's just waiting in our lobby, and then also his company. So we make those two calls and then we're also saying hey, what time Is it coming by truck delivery? Can we go to the facility at two o'clock and pick it up, just to kind of get it down to the hour? We get day, week and a lot of times we don't have tracking on that second shipment.
Speaker 1:Right, and I know that if you buy something and it's being shipped, sure, you might be able to get access through the dealer or distributor. Sometimes you might be able to get access to the shipping API so that you know it's coming on FedEx or UPS or something, but when it hits the distributor or the dealership's location, then there's no tracking, there's no way of knowing where it is and you have to rely on well, it's either coming on the morning truck or the afternoon truck. What happens to you if you're expecting it to come on the morning truck and for some reason it doesn't and nobody lets you know?
Speaker 2:Yeah, that happens daily. It's terrible. We're apologizing to the customer, giving time lines. They see their truck on hold, the part's off, waiting for a new part. They're sitting there losing money. It's a whole chain of bad because they're looking for accommodations to stay the night contacting their company. So really we're scrambling at that point but we're at the mercy of the phone. We're picking up calling. Let's say we call the part store. Our representative's name is Brian Cecilia answers the phone. We ask for the part. Oh, brian's busy, we'll have him call you back. So they can't even look, turn around, look on the shelf without the representing that you had fulfilling your order. You have to call in and get your specific person to get that level of detail. Fedex, ups might have delivered there and we don't know that. We just know what a part representative tells us. So it's a lot of chasing down people.
Speaker 1:Yeah, and if you did know that and you needed the part sooner than their delivery truck could deliver it, you'd then be empowered to make a decision hey, I need somebody to drive down to the local dealer or the local distributor and go pick it up, because I know it's there right. Exactly, if it was coming on the morning truck and that's what the plan was you've probably got things lined up in the bay ready to go. Right, it doesn't show up Now. You've tied up that bay all morning. You could have been doing something else in that bay and taking care of a different customer. So, okay, let's talk a little bit about the frustration that happens when you've got the part.
Speaker 1:Now you've installed it let's say it was a turbocharger. Now there's a core charge right Now. If everything works according to plan, you would have that turbo changed out. The customer is going on down the road. You've got the core. You want to return the core right Now. If you've got a delivery driver that's on the ball, they know that they delivered something with a core charge and they're going to come back and get it the next day. But what happens if the pickup of that core and the processing of that core is delayed. What's the impact on you and your business?
Speaker 2:The impact number one is cash flow. You bought the part. You have to put the core charge out to your customer. You're sitting there with a dead part that's worth let's call it a $500 bill waiting for UPS label, waiting for a way to get it back, acknowledgement for them to receive it. And then at that point you're tracking down emails. There's no solid process to say here I bought this part, here's how much I paid, here's my core. It's not tied to that order, it's its own separate loop. And then, by the time you get it back, your track, your accounting, is tracking hey, I did get the score return and credit back on the invoice. It's a manual process.
Speaker 1:Yeah, as a sales account manager, like I used to be out on the road and I would you'd be one of my customers. I'd be assigned to your account so I'd come and visit you on a regular basis. Do you know what the two most common phone calls I got as a sales account manager was? One? That part was supposed to be here this morning. It didn't show up. I can't get through to Brian on the counter. Where the hell is it? Go find it and get it to me right now. The second most common call hey, you guys owe me a core charge credit or there's a warranty credit.
Speaker 1:I, I did everything. I put the paperwork in, I submitted it, you guys picked it up and I've heard nothing. Can you, you know? And it's on my bill. I just got my monthly statement. I don't want to pay that $4,000 worth of core charges because I already submitted them. I should have gotten my credit, or maybe it was a warranty. So if you're talking about just getting a part to you, we've already identified Many, many phone calls then where there's a core charge. Many more phone calls. Talk to me a little bit more. I did mention warranty, but talk to me a little bit more about the frustration that you've had personally Trying to get warranties processed more teeth, terrible.
Speaker 2:So you get a part, let's say turbocharger for example finally get the part in, put it on your truck and Then you notice it has an issue. Now first thing you're doing is pick up the phone calling who everybody from? Hey, this turbo has issues. They want you. Usually it's an email warranty at, you know Generic, for their company and they have a warranty form. You know mileage taken off, mileage put on symptoms, your order number. You got link.
Speaker 2:You got to manually take your order and put everything into this form, submit it and then wait, hopefully instantly, but sometimes it takes the next day for them to get your label. By the time you get your label, that truck still sitting in your bag. A whole another day at downtime You're putting the label on, shipping it out and then you're waiting for their process to test the turbocharger, see if it's a valid claim, and then from there they have to fulfill a new order tracking back to you. So I would say it's, it's a good week if that company's on the ball and then it's, you're throwing your part into the abyss. You know there's no, you kind of have to wait for it arrive, check your initial tracking. From there it's just a waiting game.
Speaker 1:So the way that we often did warranties is I would like, if you were my customer and let's say the truck was out on out for a month, are you done the repair a month ago? The guy brings it backs as look, this turbos, you know it's bypassing, there's something wrong with it Like we need, we need to get this fixed. So you'd phone me and say, jamie, I got a problem with this turbo I bought from you a month ago. I need another one. And I'd just be like, yep, give me a PO, I got another one coming. I'd get it to you. We take care of your customer. You didn't. You know, I didn't voice you. You didn't voice your customer. The customer is back on the road. And you'd tell your customer as soon as I hear from them that it's approved, I'll give you a credit on the original one. And I'd be saying that to you and I'm relying on my supplier.
Speaker 1:So oftentimes what would happen is like a month later You'd phone me and usually it's when your statement comes out and you'd phone me and say, jamie, there's like a $6,000 bill on my statement here for this other Turbo. It's warranty, what's going on? And then I'd say I'm sorry, max, let me, let me give you a call back. So then, what do I do? Well, I phone the parts counter, I phone my warehouse, then they don't know. So then I phone my supplier. I got to go through two, three people to find the right person and then they tell me oh, I'm sorry, but that turbocharger was contaminated, yeah, okay. So then I phone you back and I tell you the bad news. The bad news is, one You're not getting credit, and neither is your customer, and two, it's contaminated, which means that this other one we put on is probably contaminated as well, and he's about to break down again. Now you give that news to your customer. What level of ballistic does that customer get to?
Speaker 2:Oh, you're basically done. You're getting every some call. You're being called every single name of the buck. They're safety reps calling you. They're logistics guys calling you. You're drinking a back over view. Oh, it's just all downhill. You know there's no good way out of that.
Speaker 1:And this happens every single day. So we're going to take a break to hear from our sponsors. When we get back, we're going to talk about a solution that is going to address these specific problems. So let's take a break. We'll hear from our sponsors, we'll be right back.
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Speaker 1:Max, I think you and I did a pretty good job of describing the realities on the ground. I just want to bear with me for a minute because I got something I need to get off my chest. I love this industry. I love the trucking industry, but more specifically, I love the heavy duty parts industry. I know that the people who work in this industry by and large are heart and soul kind of people. They're amazing.
Speaker 1:The traditional distribution channel is one that has served us well for many decades, but there are some people who are clinging onto it for dear life. It frustrates me to no end, because the reality is as good as the traditional distribution model was in many respects. Just as we laid out, there was some major inefficiencies with it. Up until recently, we didn't have the technology to be able to solve it. All you could do is maybe try to improve your systems and throw good people at the problem. We don't have people. We're running out of people because all these great people with 30, 40 years of experience are leaving the industry. There's a lot less people at you and I's age in the industry to take over. We don't have people. We can't just throw more people at the problem. We've got to fix these inefficiencies.
Speaker 1:I'm wanting to put a call out to everyone in the industry. You all say that you have years of experience, high quality products, competitive pricing and excellent customer service. This is built into every heavy duty parts distributor and manufacturers value proposition. How good is our service If the result is what did you say, max? This happens every single day. Every single day, you are frustrated with the traditional distribution model because of these specific inefficiencies. You are having to make dozens of phone calls. Your customers are frustrated. They're angry. The heavy duty industry. I know we can do better. It's time for us to recognize that there are aspects of the traditional distribution model that are just horrible. There's some parts of it that are amazing. I never want to get rid of the relationships. We obviously need inventory on the ground, regionally. We need good quality people. I don't want to change any of that. Let's retain all of that, let's be open-minded and let's take our businesses to the next level. Okay, I'm off my soapbox. What do you think, max?
Speaker 2:Yeah, I mean everyone blames the ship, cargo, the train, the UPS delivery, but no one sees right in front of you. Did the box come in? Is it sitting on the desk? All the micro transactions that happen. None of that distracts that's person to person. It's easy to blame it on hey, the ship didn't come, or whatever. But how do we fix it on our micro level, what we could control? I think that's what VisiParts has the answer to.
Speaker 1:This is like the world premiere reveal of visipartscom. What is VisiParts? Visiparts is a technologically-based solution that is going to reduce the number of phone calls and transactions on that micro level by as much as 75%. This is a technology that is going to give distributors and dealers and their suppliers the ability to provide complete visibility to wherever parts are, not just when they're being shipped via UPS, fedex or some other LTL freight company, but also visibility from when it's on the ground, from the distributor location, the dealer location, to you. It's going to open up a communication hub that is integrated, easy to use and is going to provide you, the customer who is working on the equipment, the access to anybody and everybody needed to be able to find out the information you need right then, and there we are very, very excited about this. Max, just speak to me a little bit. As we laid out the idea behind VisiParts, what were you thinking and feeling when you first heard it?
Speaker 2:As everyone thought, hey, we have tracking, there's a solution for this. But then we dug deeper and noticed, from our perspective, how many phone calls hey, we look at the tracking, we're looking at the tracking as we're making the phone call what's missing? And then kind of digging deeper and deeper and deeper. We know all the steps it takes for that one box, that one part, to get to the location. That's the biggest downfall is communication from your distributor to your parts house, to the end user.
Speaker 1:And I know from the work that I do as a consultant, so I also have a business called the Heavy Duty Consulting Corporation. We work with a lot of manufacturers and distributors, and one of the areas of focus that we work on is with e-commerce and creating a digital sales channel to be able to try to facilitate the freer movement of parts and try to give more visibility, and e-commerce has its place. But one of the things that is missing is once that part reaches the distributor level and then it goes out through the delivery system. There's nothing in the e-commerce system that can really track that and provide any visibility, and there's also a real gap in the communication for all of the stakeholders in it. So you've got the supplier and then you've got at the distributor or dealer level. You've got a parts person, a sales account manager, a delivery driver, a warehouse in your shop. You might have someone who's a shop foreman, the technician and the end user customer. There's a lot of people that have to communicate, and so one of the other big issues that I run into when I'm consulting with these companies is they start to stack up their technology, so they have an ERP, and sometimes it's great and sometimes it's super outdated and a legacy ERP that's going to be very difficult and problematic to work with when you start hooking up new technology to it. You've got an e-commerce platform and you may or may not have made a good choice there. There's a lack of data, and right away as you start to bring and link all of these things together, you start to have breakdowns in the technology stack, and getting all of that to work together seamlessly is really really challenging, and so one of the things that I really saw as a need is that we needed to create a solution that gave manufacturers to the distributors and dealers and dealers and distributors to their customers a user interface that was super easy to use, that used technology that everybody has in their hand, especially the people who are mobile, like drivers and sales people. That integrated all of these technologies into one place and provided this great experience where you could cut down on the amount of phone calls. You could save people enormous amounts of time, and to me, it's bringing all of this together and it's 2023, you'd think that this would have already been done, but the reality is that this is a real challenge to accomplish, but the company that we've partnered with to make Vizzy Parts a reality, has a technology stack and has the customized ability to work with individual distributors, dealership groups, manufacturers, and to seamlessly bring all of these things together into this one great user experience. So that's the part that I'm really excited.
Speaker 1:This is a real need in the industry. This is a problem that is costing and if you do the math like let's do the math, max, if you've got a parts counter that has one parts manager, four parts people, a warehouse person, a delivery driver and an outside salesperson, you're spending about a half a million dollars a year in salary. And if 20% of their time which is about what it is is just spent chasing out of stock parts just the out of stock parts that means that you're spending at least $84,000 a year. People making phone calls that never mind the cost to someone like you and your organization, your customer at the fleet level or owner operator level, and then up the supply chain too, because guess what, a lot of those phone calls go to the supplier. So this is a problem that is literally costing the industry hundreds of millions of dollars every single year. This is a really big problem and I think for a long time people just accepted the status quo, but we're here to change that, we're here to challenge that status quo.
Speaker 2:I agree and, jim, I think the answer everyone answered that question with putting more people in place, more expenses. Hey, we have more sales. We can't track these. We're losing visibility. They put more people in to handhold those tracking numbers packages. There's not been a real solution.
Speaker 1:No, no, and it's not a solution. There's been some solutions that have come forward that have addressed specific aspects, but when you put it all together, how do you provide that visibility throughout the supply chain? We saw firsthand what happens to our society when our supply chain collapses, so this is an opportunity for us to put forward a real solution that's going to take the supply chain truly into the next century. It's already 2023, but I feel sometimes we are still operating like it's 2000, 2005, kind of thing. So, finally, can we bring forward something that, end to end, provides this solution? Well, this is what Vizzy Parts is, and I'm so excited to be bringing this to the marketplace, and I know for you, you know the power this is going to have inside of your organization. This is going to have a huge economic impact for your repair shop as well, won't it?
Speaker 2:Me as well. Night and day difference. We'll have real ETAs, we could plan our days better, expenses will be lower and that's just us on the ground level as a shop. Everyone throughout the process. Once they adopt it, they have full visibility on it. It's going to change the industry.
Speaker 1:Yeah, and what I'm excited about, too, is that there are a few dealership groups and distributors out there that are pretty advanced with their technology and they're working towards kind of trying to solve this problem as well, but there's very few that have really been able to get to a certain level of sophistication.
Speaker 1:Most of our distributors and dealers out there they're still doing it the old school way and the technology is going to be able to just you might not have updated anything for the last 15 years and you'll be able to bring busy parts into your business and just leapfrog your business into a leadership position in this industry. So that's what I'm really excited about, and this is something that can be used by manufacturers and distributors and dealers, so throughout the entire supply chain and this should always be free to the end user customer right. The end user should just be able to see it, access it, get the visibility of their parts and buy parts. And the people who make the parts and sell the parts they're the ones who should make the investment, get this technology in place and provide their customers with that great user experience that's been missing literally for decades.
Speaker 2:I agree, you could order a pizza with more visibility than what we have for now for parts tracking.
Speaker 1:That's a great point, right? You could order a $20 pizza and have more technology at your disposal than ordering something for thousands of dollars. That goes into a work vehicle that makes a living for the person operating that truck and is part of the trucking industry, which supports society at large. So it's ridiculous that that's true, but a truer statement hasn't been made. So if people want to learn more, go to visitpartscom.
Speaker 1:This is just the beginning of this journey for us. We're so excited to announce that, If you want to see a little bit of what we're talking about and what we're doing, go there. We're going to have a lot of updates coming very soon and more information coming very soon. But get over to visitpartscom, Fill out the form, book a meeting with us. We're going to talk about your solution and we're going to show you a heck of a lot more than what you'll see on that website. There's also a whole series of videos there now that I've recorded really, really going into depth about this problem, the solution, the people and the team that we've assembled. So this is really good news for the industry. We're super excited. Max, thanks so much for coming on the show and just having some straight talk, just calling it the way it is. I really appreciate that.
Speaker 2:I appreciate it too, Jamie. I'm excited for the future.